Holly's Blog: IPO-tastic and the Wisdom of this Crowd

By Mike Narouei, Content Producer at Boring Money

11 Dec, 2020

Another strong week for shares as the stock market continues to take giant steps away from the less buoyant reality we see around us and read about in the news. The FTSE100 is up despite Brexit shenanigans and some signs of panic buying of food as the prospect of no-deal looms.

Another strong week for shares as the stock market continues to take giant steps away from the less buoyant reality we see around us and read about in the news.

The FTSE100 is up despite Brexit shenanigans and some signs of panic buying of food as the prospect of no-deal looms. Yes, Tesco Chairman John Allan has warned of price rises and shortages of fresh food, sparking mass purchases of Brie in Knightsbridge.

The pound has been yo-yoing around as we all try and guess the results of Boris’s scallop-and turbot-fuelled discussions with Ursula VDL. As we are warned of a ‘strong possibility’ of no deal, the economic and commercial consequences are glum. I’ll stop there before I start ranting.

Further afield, all eyes on the States

DoorDash shares in the States had an IPO (an investment launch) on the stock exchange this week and, after a day of trading, shares were 86% up in this meal delivery business. Yum yum.

Next up to join the IPO fun were Airbnb. The price was set at $68 on Wednesday and, after a first day of trading, closed at a blistering $145 last night. Blimey. In a real sign of the times, this loss-making firm is now valued at 2x the world’s hotel group, Marriott. The MBA Mantra? Don’t make stuff. Just make other people’s stuff available.

IPOs are of course not always a golden ticket. Some crash and burns have included WeWork. They were due to IPO last year, but the valuation slid from $47 billion to $10 billion in just one destructive month and then the IPO went……quiet. Another dog (geddit?) was Pets.com in the 90s – raised over $80 million at IPO only to go to doggy heaven less than a year later.

Other US darling du jour, Tesla, has been going from fourth gear to fifth this week, with its share price bouncing around from ‘lows’ of $574 to highs of $654. They will join the S&P500 index on 21st December so that’s driving growth – but with an increase of 660% already this year you’ve got to think they might hit the skids at some point.

Some better news for local income seekers...

A glimmer of better news closer to home. Most of the banks have expressed a desire to be allowed to announce dividends at their full year results in the New Year, and have satisfied the powers that be that they are financially able to do so responsibly.

According to platform Interactive Investor (https://www.boringmoney.co.uk/companies/interactive-investor/), “given the level of the dividend yield prior to the imposition of the cuts, it is clear to see why this could have a positive effect on the FTSE100 as a whole as an investment destination for income investors in particular – as of March, Lloyds Banking was yielding around 10%, Barclays 9.6%, HSBC 8.2%, Standard Chartered 4.4% and NatWest 4.3%."

The Boring Wisdom of our Crowd…..

Finally  I’ve got a challenge for our readers. As we think ahead to 2021, I want you to help me build the Boring Money fund. I’m really curious to test the wisdom of our crowd. What should we include?

What regions and sectors do you guys reckon will do well? Are you all about continued growth in the US? Or are Emerging Markets your pick? What about various sectors? Top of the pops with retail investors more recently have been quite focussed thematic investment opportunities based on what we see and read around us and in the news. Genomic ETFs anyone!? 🤓

Please don’t feel you have to be an investment supergonk to participate. Tell us where you would invest and in what proportions, and we will report back next week. I’m then going to work out the Boring Money 2021 Fund and see how I set that up. Let’s see how we do? 💪

I appear to have descended into using emojis. This is generally a sign that all is not well! 🤮 It is also hugely addictive. Time to stop! Have a great weekend everyone. 💃🥂

Holly